Jabil Inc.

Jabil had a good quarter and managed to surpass Wall Street expectations with respect to both, its revenues as well as earnings. The company has shown a strong resilience despite a turbulent business environment being consistently affected by the pandemic, the conflict in Ukraine, worldwide inflation, supply chain issues, and numerous energy shortages. Despite these difficulties, the company managed to increase core operating margin by 40 basis points over 2021 levels while achieving year-over-year growth in revenue of 14%, core operating income of 24%, and core EPS of 36%. The management anticipates that some consumer-focused end markets will perform worse than they did over the previous 18 months of solid growth. On the other hand, infrastructure rollouts for 5G are progressing very well, and demand in the U.S. and Europe is still very high. Jabil further enhanced its end-to-end manufacturing solutions by introducing Innovation Acceleration Services that shorten the entire product lifecycle, from gathering user insights and needs to accelerate the road to commercialization. Overall, we give Jabil a ‘Buy’ rating with a revised target price.